I apologize for our loose use of language in the theory book. As we developed Dramatica, we did tend to have multiple (context-specific) definitions of items related to the parts and processes of stories and story development. Sorry about that.
The phrase, "The Elements of Theme" is meant to mirror the part of the book called, "The Elements of Structure." In this context, element means, "a part or aspect of something abstract, especially one that is essential or characteristic." (per Google definition) The same definition holds true for use with Classes, Types, and Variations, since we look at the entire structure in the context of Theme, and these are structural levels within the Dramatica structural model. The Element level is the fourth, and final/lowest level in the Dramatica structural model, which makes it one of the "Elements of Theme" AND the name of the lowest, most granular level in the structural model. We refer to the items at the Element level as ELEMENTS.
In the context of CHARACTERS, particularly objective characters (e.g. archetypes), they are built from the Elements found on the Element level of the Dramatica structural model. So the "It's Elemental!" section is an intersection of the various definitions/usages of the work "Element" in Dramatica.
I hope this makes the issue clearer instead of foggier.